Late bloomer retirement

Feb 23, 2018 | Retirement

It’s the eve of your 39th birthday, and you still haven’t started saving for retirement. Don’t panic. You’re not alone, and if you start acting now you can catch up. Waiting until your forties or fifties to start saving is not ideal, but where there’s a will there’s a way. Here are some steps to get the ball rolling on your retirement savings, even if you’re late to the game.

How much is enough for retirement? 

That’s the first thing you need to figure out. Decide what age you want to be when you retire and then calculate your future living expenses for post-retirement life. Take into account any income you’ll have (social security, part-time jobs or your handmade sweater sales on Etsy) and expenses you’ll have (debt, health insurance, trips to Honolulu). From there, you’ll know how much money you’ll need upon retirement and how much you’ll need to start saving per year to get there.

Should I change my long-term retirement plan? 

If you were planning on retiring at 65, but you crunch the numbers and find out the only way that’ll happen is if there’s a winning lottery ticket in your future, then it’s time to make some changes. Consider a side gig to make some extra cash. The tips you could make while driving for a ride-share service would put you just a little bit closer to a life of leisure. Or, put a little extra scrutiny into how you spend money. Could you wait until that new movie is available to rent from the comforts of your home, instead of paying movie theatre prices? Look in the fridge for leftovers instead of running out for takeout? Every dollar counts, and saving more now will pay off later.

Where should I invest my savings? 

Once you’ve got it all planned out, it’s time to start saving. If you’re a little rusty on the different types of retirement accounts, check out this article. If you decide on a 401K, an IRA, or both, make sure to max out your contribution each year. Also, take advantage of any matching plans your employer might have, because who doesn’t like free money? And if you’re celebrating your 50th birthday, you can take advantage of catch-up contributions. This means you can invest even more dough per year into your IRA. This is a great way to make up for lost time.

Can I take financial risks? 

When you’re in your twenties, you’re encouraged to invest in stocks and take financial risks. When you’re in your forties — sorry, we mean 39 — you may not want to take risks. Unlike the twenty-somethings, you do not have 40 years to recover from your losses. Do invest, but do it smartly, in low-risk options such as bonds or mutual funds.

Saving for retirement can be intimidating at any age, especially if you didn’t start early. But it’s never too late to jump on the bandwagon. And when you retire, your three-week vacation to Honolulu will be just as sweet as the trips your early-retirement friends are taking. Maybe even better.

Pin It on Pinterest